{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T09:18:37-04:00", "answer_date": "2024-06-28 09:18:37", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4281540", "url": "\/study-help\/questions\/assume-an-investor-company-purchased-20-of-the-outstanding-voting-4281540", "question_creation_date_js": "2024-06-28T09:18:37-04:00", "question_creation_date": "Jun 28, 2024 09:18 AM", "meta_title": "[Solved] Assume an investor company purchased 20% | SolutionInn", "meta_description": "Answer of - Assume an investor company purchased 20% of the outstanding voting common stock of an investee. Which of the following | SolutionInn", "meta_keywords": "assume,investor,company,purchased,20%,outstanding,voting,common,stock,investee,statements,false", "question_title_h1": "Assume an investor company purchased 20% of the outstanding voting common stock of an investee. Which of the following statements is false about the financial", "question_title": "Assume an investor company purchased 20% of the outstanding voting common stock", "question_title_for_js_snippet": "Assume an investor company purchased 20 of the outstanding voting common stock of an investee Which of the following statements is false about the financial reporting of the investment in the investor's published financial statements (Ignore any potential effects of intercompany transactions be tween the investor and the investee ) Please advice A) The investor company can make an irrevocable election to report the Equity Investment at fair value, even if the investor has significant influence over the investee B) If the investor company has no influence over the investee and no readily determinable fair value exists for the investee's common stock, in all years the investor holds the investment it can report the investment at the original cost of the investment C) If the investor has significant influence, the balance of the investment in investee account will equal 20 of the investee's stockholders' equity, adjusted for 20 of the unamortized differences between the investee's net asset fair values and book values (i e , for gross differences initially determined as of the date of investment in the investee) D) If the investor company has no influence over the investee, changes in the market value of the investment in the investee are only recognized in other comprehensive income", "question_description": "

Assume an investor company purchased 20% of the outstanding voting common stock of an investee. Which of the following statements is false about the financial reporting of the investment in the investor's published financial statements? (Ignore any potential effects of intercompany transactions be- tween the investor and the investee.) Please advice.<\/span><\/p>

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A) The investor company can make an irrevocable election to report the Equity Investment at fair value, even if the investor has significant influence over the investee<\/span><\/p>

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B) If the investor company has no influence over the investee and no readily determinable fair value exists for the investee's common stock, in all years the investor holds the investment it can report the investment at the original cost of the investment<\/span><\/p>

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C) If the investor has significant influence, the balance of the investment in investee account will equal 20% of the investee's stockholders' equity, adjusted for 20% of the unamortized differences between the investee's net asset fair values and book values (i.e., for gross differences initially determined as of the date of investment in the investee)<\/span><\/p>

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D) If the investor company has no influence over the investee, changes in the market value of the investment in the investee are only recognized in other comprehensive income<\/span><\/p>", "transcribed_text": "", "related_book": { "title": "Core Macroeconomics", "isbn": "978-1429278478, 1429278471, 978-1429278492, 1429278498, 1464191433, 978-1464191435", "edition": "3rd edition", "authors": "Eric Chiang", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/648.jpg", "uri": "\/textbooks\/core-macroeconomics-3rd-edition-648", "see_more_uri": "" }, "free_related_book": { "isbn": "3031313429", "uri": "\/textbooks\/numerical-approximation-of-ordinary-differential-problems-from-deterministic-to-stochastic-numerical-methods-1st-edition-978-3031313424-305288", "name": "Numerical Approximation Of Ordinary Differential Problems From Deterministic To Stochastic Numerical Methods", "edition": "1st Edition" }, "question_posted": "2024-06-28 09:18:37", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/you-are-the-manager-of-a-large-but-privately-held-201014", "description": "You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online....", "stars": 3 }, { "url": "\/study-help\/introduction-to-probability-statistics\/show-that-there-does-not-exist-a-random-variable-x-1983923", "description": "Show that there does not exist a random variable X having mean ???? and variance ????2 such that P(???? 3???? \n \n \n \n Answered: 1 week ago", "stars": 3 }, { "url": "\/sherry-moved-to-chicago-in-the-current-year-to-take", "description": "Sherry moved to Chicago in the current year to take a new job after being laid off from her job in San Diego. 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